IHG dividend: cash coverage and outlook
IHG declared an interim dividend of 64.5¢, and its forecast dividends are $1.419 in 2027, $1.561 in 2028, and $1.717 in 2029. In 2025, IHG generated $671m of free cash flow, paid $270m in dividends and spent $897m on buybacks, so shareholder payouts exceeded free cash flow.
How much does IHG pay in dividends?
Dividends also distinguish the cases. The declared interim dividend is 64.5¢, and the recent annual increase has been 10%. Base dividends are $1.419 in 2027 and $1.561 in 2028. They reach $1.717 in 2029. The bear case holds dividends at $1.355 after the first period, while the bull case reaches $2.043 through faster growth. The bear reflects the 2020 withdrawal of a recommended final dividend; the base follows the recent record.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| − Dividends paid, per share | 173.30 | 158.90 | 144.12 | 128.02 | 0.00 |
| − Share buybacks, per share | 575.74 | 493.25 | 464.71 | 264.84 | 0.00 |
| = FCF not paid out, per share | 300.00 |
What this means. The company's own free cash flow per share is higher because it uses its own rules that leave out some spending and add back some cash items.
Does IHG’s cash cover its dividend?
From 2022 onwards, shareholder payments exceeded free cash flow every year. In 2025, IHG generated $671m of free cash flow. It paid $270m in dividends and spent $897m on buybacks. That created a $496m shortfall before other uses and sources of cash.
Net income was $758 million in 2025, while cash from operations was $898 million. Capital spending was $197 million and lease payments were $30 million. That produced free cash flow of $671 million. Deducting $72 million of stock pay gives a narrower “real free cash flow” of $599 million. This is an analytical allowance for dilution, not a second cash payment.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 671 | 600 | 783 | 511 | 552 |
| − Dividends paid | 270 | 259 | 245 | 233 | 0 |
| − Share buybacks | 897 | 804 | 790 | 482 | 0 |
| = Free cash flow not paid out | 552 | ||||
| Paid out, % of free cash flow | 173.9% | 177.2% | 132.2% | 139.9% | 0.0% |
What this means. The company's own net debt is higher because it includes lease obligations and certain derivative amounts, while our count leaves those out.
What could change IHG’s dividend?
Management targets adjusted EPS growth of 12–15% a year across 2026–2027. It targets annual fee-margin expansion of 100–150 basis points. Adjusted earnings should convert fully into adjusted free cash flow on average across 2026–2027, with net debt to adjusted EBITDA targeted at 2.5–3.0 times. Annual key money—funds that may support hotel openings or renovations—and maintenance CapEx is $200–250 million for 2026–2027. Gross CapEx is expected to average $350 million a year.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 979 (848 / 1,036) | 1,071 (807 / 1,190) | 1,169 (781 / 1,350) |
| Dividends per share | 1.42 (1.35 / 1.42) | 1.56 (1.35 / 1.70) | 1.72 (1.35 / 2.04) |
| Price to earnings | 26.00 (21.00 / 30.00) | 26.00 (19.00 / 32.00) | 25.00 (17.00 / 34.00) |
What this means. Price to earnings shows how many dollars investors pay for each dollar of the company's earnings.